Government schemes to help you buy a home in 2021
There are a number of government schemes available to help you buy a home and the eligibility criteria has changed for some. Which could you be eligible for in 2021?
For some people, saving a deposit, securing a mortgage or finding the right home at the right price is such a struggle that they are priced out of buying on the open market. If you’re in this situation, it is worth looking into the Government schemes on offer to help you get on the property ladder.
Help to Buy: Mortgage Guarantee scheme
The government launched the new Mortgage Guarantee in the budget 2021 aimed to help buyers with a 5% deposit.
What you should know
- This scheme allows you to get a mortgage with just a 5% deposit
- The government has promised to underwrite 15% of the mortgage in the event that you default. As a result, mortgage lenders feel confident enough to offer you a 95% mortgage
- The scheme applies to all types of properties (new build and old) that cost less than £600,000
- First time buyers AND existing homeowners can apply
- You must have a regular income and a good credit rating.
Find out how the mortgage guarantee will work and how to apply.
Help to Buy: Equity Loan (2021 – 2023)
Through a Help to Buy equity loan, the government will lend you up to 20% of the value of a property in the form of an equity loan – or 40% if you’re in London. You’ll have to find a 5% deposit and secure a mortgage to cover the remaining share of the property.
What you should know about Help to Buy:
- Unlike its predecessor, it’s only open for first-time buyers and there are regional price caps ranging from £186,100 in the North East to £600,000 in London
- There’s no salary cap or joint income limit applied, but an eligibility calculator will check monthly income and outgoings to ensure you can afford the mortgage repayments
- You must buy your home from a housebuilder registered for the scheme
Find out more about the Help to Buy Equity Loan
Help to Build
This scheme is to help self and custom builders get onto the housing ladder through lower deposit mortgages. When the build has been completed, a government backed loan is made available, similar to the Help to Buy: Equity Loan scheme. Find out more about the Help to Build Scheme and how to apply.
Shared Ownership (New Build)
This shared ownership scheme allows you to buy part of a new build property and rent the other part. Over time you can buy more of the property, until you own the whole thing.
Shared Ownership (Resale)
The shared ownership resale scheme allows you to take over an existing shared ownership property that the current owner has put on the market. Over time you can buy more of the property until you own the whole thing.
A Lifetime ISA, or LISA, is a type of account designed to encourage people to save for their first home or their retirement. You can save up to £4,000 a year and government will top this up with a 25% bonus.
Find out more about the Lifetime ISA and whether you should open up an account.
Rent to Buy
You can rent a newly built home with the intention to buy, thanks to this government scheme
Right to Buy
If you live in a council house or flat you may be able to buy your home at a discount under the right to buy scheme. The discount depends on where you live, how long you have lived there and whether you live in a house or flat.
Armed Forces Home Ownership Scheme
The Armed Forces Home Ownership pilot scheme (AFHOS) has now closed, and the government recommends considering other schemes outlined above – such as Help to Buy.
HOLD or Home Ownership for people with Long term Disabilities
HOLD is a specially tailored option to assist people with long term disabilities to purchase a home on a shared ownership basis.
Schemes in Wales and Scotland
- The HOA Step-by-Step Guide to Buying a Home
- How to save for a deposit
- Can I afford to buy a home?
- What type of mortgage should I get?
- Help To Buy ISA vs Lifetime ISA
- How to make a successful mortgage application
- Top tips on buying a new build home
- Selling a home bought with a Help to Buy equity loan